Trust Encompass

Estate Liquidity Planning

Ensure your estate has the necessary capital to cover taxes and obligations without forcing the untimely sale of closely held assets.

Many successful families and business owners are asset-rich but cash-poor. When estate taxes and other settlement costs come due, a lack of liquidity can force the fire-sale of businesses, real estate, or market securities at massive discounts.

01The Importance of Estate Liquidity

The IRS demands estate taxes be paid in cash, typically within nine months of passing. If your wealth is concentrated in illiquid assets like a business or commercial real estate, your heirs may be forced into distress sales or taking on highly unfavorable debt to satisfy the liability.

  • Preventing the forced sale of family businesses
  • Protecting real estate portfolios from liquidation
  • Covering estate taxes, legal fees, and settlement costs
  • Providing immediate capital for business continuity

02Creating Strategic Capital

Properly structured life insurance—often held outside the taxable estate in an Irrevocable Life Insurance Trust (ILIT)—provides an immediate, tax-free infusion of capital exactly when the estate needs it. This ensures your legacy remains intact and your heirs are not burdened.

  • Pennies on the dollar liquidity creation
  • Tax-free death benefits delivered when needed
  • ILIT coordination with legal counsel
  • Protecting the intrinsic value of closely held assets

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